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3. 2016 Extension Risk Management Education National Conference

Using Business Entities for Farm Management, Risk Reduction and Succession Planning

Robert Tufts

Summary

A business entity can be used to appoint one or two individuals as managers of the farm to reduce the need for family meetings and veto by a minority owner or deadlock on decisions. The business entity will also separate personal assets from business assets to minimize the risk of loss in case of financial difficulty, lawsuits, etc. The business entity also provides an effective mechanism for succession planning. Instead of preparing deeds to transfer property, the farmer/owner assigns an interest in the business to family members. The partnership/operating agreement sets out rights and duties for the owners and limits the rights of an owner. It also protects against creditors, divorced spouses, etc. Workshops are being presented around Alabama to educate farmers on their options.

Details

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